RMR · The RMR Group Inc.

The RMR Group Inc.’s fiscal second quarter 2026 results reflect a deliberate shift in earnings composition, with GAAP net income attributable to the company falling sharply to $1.0 million ($0.05 per diluted share) from $12.2 million ($0.71) in Q1 FY2026 — primarily due to the absence of $23.6 million in calendar-year 2025 incentive fees, which were paid in January 2026 and thus recognized in Q1. This timing effect explains the steep sequential decline in both net income and operating income ($7.0 million vs. $32.1 million), despite stable underlying operations. Distributable Earnings ($14.2 million, $0.44 per share) remained resilient but declined modestly from Q1, driven by lower base business management fees resulting from hotel asset sales, debt repayments by managed REITs (DHC and SVC), and the wind-down of AlerisLife’s operations. Management explicitly attributes this to portfolio transitions rather than structural weakness. Adjusted EBITDA held steady at $18.5 million (41.6% margin), underscoring operational consistency and cost discipline. Capital deployment accelerated: RMR invested $50 million in SVC’s April public offering and committed $6.4 million equity to a $350 million Greenwich multifamily joint venture, reducing pro forma liquidity to $130.1 million. Critically, the $0.45 quarterly dividend remains well-covered — funded 72.2% by Distributable Earnings and 27.8% by cash — with management affirming multi-year sustainability based on accumulated tax distributions and ongoing earnings generation. Forward-looking commentary highlights momentum across the platform, citing DHC and ILPT’s share price outperformance and an estimated $33 million of incentive fees on pace for calendar 2026, signaling confidence in recurring upside potential beyond the current quarter’s timing-driven softness.